In July 2024, Dough Finance, a Florida-based DeFi platform promising leveraged “looping” returns, fell prey to a flash-loan exploit that drained $2.5 million from user accounts. The exploit not only wiped out investor funds but also brought operations to a halt.
Chase Herro and Zak Folkman founded Dough Finance in 2024 in Florida. The platform attracted investors by offering high-risk DeFi strategies such as looping, a process where traders reuse borrowed crypto. Here’s how looping works:
The goal is to gain more exposure to the original asset. If the price increases, the trader makes more profit than they would with their initial deposit.
However, it all came apart with a flash loan attack in July 2024. Hackers targeting the DeFi protocol manipulated the smart contract and got away with about $2.5 million worth of cryptocurrencies.
The $2.5-million loss was the nail in Dough’s coffin. Investor Jonathan Lopez, who deposited $1 million based on encouragement from co‑founder Chase Herro, saw his savings evaporate. He was reportedly advised step-by-step through the looping strategy just before the hack struck.
Despite promises to compensate users via proprietary tokens convertible back to Ether (ETH), only $281,000 was ever recovered. Communications had gone silent by August 2024, and by May 2025, Lopez had filed a fraud lawsuit against Herro. His court date is set for Florida in April 2026.
This case spotlights a growing trend: Users are increasingly seeking legal recourse for failed crypto platforms once unofficial assurances fall apart.
